Posted
by
kdawson
on Sunday February 24, 2008 @09:11PM
from the few-billion-more dept.

Reservoir Hill writes "Randall Stross has an insightful article in the NY Times that says that if Microsoft thinks this is the right time to try a major acquisition on a scale it has never tried before, it should pursue not Yahoo but SAP, another major player in business software, thus merging Microsoft's strength with that of another. This is more likely to produce a happy outcome than yoking two ailing businesses, Yahoo's and Microsoft's own online offerings, and hoping for a miracle. Stross points to Oracle as a company whose acquisition strategy has picked up key products and customers while avoiding venturing too far from its core business, or overpaying. Stross recommends that Microsoft acquire SAP and leave it alone as an autonomous division — which would avoid a culture-clash integration fiasco. Besides, large enterprise customers are arguably the best customers a software company can have. A few dozen well-paying Fortune 500 customers may actually be more valuable than tens of millions of Web e-mail 'customers' who pay nothing for the service and whose attention is not highly valued by online advertisers."

The article is looking at things totally from the wrong point of view - it's as if they believe that Microsoft's problem is that it has a huge pile of cash & don't know what to do with it.

It's not. Microsoft's problem is Google. Google are eating them in the only arena where you can make serious money on the web (ad brokerage) and doing things to threaten MS's monopoly elsewhere (Google Apps, Photoshop on linux, Webmail, etc)

The Yahoo purchase might not be a solution to this problem, but a SAP purchase sure as hell won't be.

(and frankly, I can't imagine SAP's websphere/java using userbase being enthused with the next SAP release being C# only)

Great point. However, it's worth mentioning that Microsoft isn't in all that much trouble from Google. They still have a virtual monopoly on the OS market, which means that the only real "threats" to Microsoft's main income source are sites like/. where people give information about and advocate the use of other operating systems.

Because Google would/never/ considering doing anything in terms of an operating system. That's just silly!

I know you're just being funny, but you're right that they probably wouldn't bother coming up with their own proprietary OS. I mean, they already use Linux internally anyway: that plus a lot of their own code is one of their strengths.

Now, what would cause problems for Microsoft would be a Google distro marketed to the Dells and HPs and Lenovos of the world, and also on store shelves. Google has both the brand recognition and the in-house technical skill to pull that off, and it's probably that which keeps Ballmer awake at night. Hell, much of the overseas market would jump on a Google OS in a heartbeat: Microsoft is not well-liked in many parts of the world. I kinda hope they do it, just to shake up Redmond a little.

Worse yet for Microsoft, if such a Linux distro just happened to integrate phenomenally well with Google's online services and Android offering... well.

Good point, but many more people know what Google is (or at least know what it does). If you went around asking what Google and Ubuntu are to a bunch of random schmoes then chances are that much more would be familiar with only Google. Google could create their own distro, or they could build an OS from scratch which could be successful if it were interoperable with all the other players and, of course, it Just Worked(TM) -- but that would be one hell of an undertaking.

By one hell of an undertaking you mean a massive endeavor but one that can accomplished? Because Apple essentially wrote a new OS from scratch recently, and new versions of Windows have featured massive rewrites (thankfully progressively getting better, sans some of the nastier uglier side of "trusted computing.")

I don't know, if Apple can do it, I think Google can too. Maybe Google should just acquire Canonical and work from there though? They already employ Andrew Morton I believe.

actually I work a lot with business students, and (at least in academic circles in Vienna) it's different (from my POV): most people ask me, if I boot my laptop in front of them*, if I am using that "ubuntu thing". Some of them never heard linux before, or just read it somewhere as a word. but many more seem to know ubuntu!I also have to do with a lot of students from the states, or different countries (since vienna business school is one major destination for most exchange students in the business sector)

Yes, I am posting this from Ubuntu, and I'll admit they've come a long way in the past few releases - but there are still some major issues that you wouldn't see with a normal retail O/S:

(these are on gutsy, fresh install)

1. The search function doesn't work (yes there are other functions to search, but the main search button on every window.. that one doesn't work, at all.)
2. The network manager freezes up my computer when I switch saved networks, o

Hell, much of the overseas market would jump on a Google OS in a heartbeat: Microsoft is not well-liked in many parts of the world.

Maybe that's in Europe and I'd love to believe you but... In Japan, Microsoft is pretty much a given even though certain Japanese companies have contributed strongly towards Linux. In the Philippines, Microsoft would be hated because a single license costs more than most people (who are working, the unemployment rate is very high) make in a month but it's tolerated by internet cafe owners who need to peddle computer games and the fact the internet cafe owners can pirate it since they usually can't afford

> To speak for the other 99% of the world, replace 'disdain' with 'envy'.

Interesting. What exactly are they envious of, the money? The power? This is a serious question. A lot of us here at Slashdot have the problem that we don't see things exactly as those other 99% do, and you can help us by being a bit more specific.

Right? Somehow, I got modded 'Troll' for that (my first negative mod in ten years, BTW).

It's almost as if the public at large has no moral feeling about the subject, they simply see a big corporation with immense stores of money that they probably don't deserve, but can't prove any wrongdoing. When someone does prove wrongdoing, Microsoft seems to simply pay lip service to the issue and continue unscathed. The basic thought is one of, "Someone should take Microsoft down a peg or two; Nobody deserves to

I think they should pursue this line (more or less the gOS the Everex Clousdbook uses) not in the same game as Microsoft, but to further commoditize the OS. Having an OS that's inexpensive, reliable and able to easily integrate online app offerings would inflict another painful wound on Microsoft.

I dont think they will and I don't think they have to. If they can move productivity apps off of the desktop and onto the web then a large part of Microsoft's monopoly falls apart. If the stuff that 90% of users do on the web can be done on any internet enabled machine, even an iPhone, then all that matters is the other 10% of what you want to do.Sure, that stuff will still be OS dependent but most people never do that stuff anyway and the ones that do can choose the platform they want for it. You want t

And Google has a virtual lock on the internet advertising market (75% world wide in 2007 IIRC).

According to Microsoft, Google had about 65% of the worldwide online advertising market in 2007. But that is just according to how much profit each company reported and does not necessarily reflect how much potential money there is if you count on one or more of those companies selling at below market value (probably Microsoft at least as this is what they do in everything but OS and Office suite markets and they have piles of cash) in order to try to gain ground.

The bigger concern for the industry though should be where Mr Softy and The Goo go next. Microsoft can buy SAP and Yahoo, its not either/or. Google is likely to buy stuff as well. The same math works for them.

I'm not so sure. MSFT is going into a rather huge debt, and for the first time in its history... just to buy Yahoo. It'll take more than a couple of years to pay that off... unless they can turn a ~90% desktop share into a 150% one.

Now eventually they can, but I'd give it about five years before their budge3t can take that kind of hit, at least at the rate things are going for them. Problem is, five years is almost an eternity in this industry, and a whole bucketload of things can happen between here and there.

How is Microsoft going into debt? The deal is maximum 50% cash, with the remainder being Microsoft shares. Right now Microsoft has a war chest of 19 billion or so and thus they would not have to go into debt.

Microsoft to borrow money for Yahoo deal [yahoo.com]
"Microsoft Chief Financial Officer Chris Liddell said the software company may take on some debt to finance the cash portion of its 50-50 stock and cash offer for Yahoo, instead of drawing down its entire $21 billion cash pile."

Microsoft will borrow money, but may not go into debt, as their assets will exceed the value of the borrowed sums.

I think both Ballmer and TFA miss the natural acquisition target. It isn't Yahoo!, for reasons already discussed to death. But it also isn't SAP, which is not going to generate any obvious synergies for Microsoft. No, the natural target is Adobe.

In one fell swoop, by buying Adobe Microsoft can guarantee the success of several of their products, such as Silverlight, which Microsoft apparently sees as very important for its future. This would be done by somehow 'unifying' Silverlight with Adobe's Flash an

Macromedia was a perfect acquisition, and for some unknown reason, Microsoft thought about it then failed to pull the trigger. Imagine full integration between Visual Studio and Dreamweaver/Flash/Fireworks. That would have been something to get excited about.

Great point. However, it's worth mentioning that Microsoft isn't in all that much trouble from Google. They still have a virtual monopoly on the OS market, which means that the only real "threats" to Microsoft's main income source are sites like/. where people give information about and advocate the use of other operating systems.

I disagree on a minor point:It's not the threat of a Google OS (or any other OS) becoming a better product than Windows. The real threat is that the OS is becoming fairly irrelevant as a marketable product because the move to applications on the web (as opposed to the desktop) makes the question of OS choice moot (just choose the cheapest one).

If everything I use is in the browser I really don't care what OS I'm using, just as long as it 'runs' the web. Microsoft is risking irrelevance by not having a ma

What are Microsoft's two biggest cash cows:Office. What's the lock-in/network effects here? The office file format, ubiquity, and the UI. Google wants to take over this space, not that they want to sell office apps, but they want the docs to be more under their control, both with an open standard (which violates the office format lockin) and be able to see more docs (google docs). The best part for Google is, they don't even need to have the best app available. They just want the open format, and googl

MS has failed dismally with its various acquisitions, with very few exceptions. MS core money makers are OS and Office. They seem to be putting very little energy into Vista and fixing its problems, doing something which would make their core business sound. In fact it looks like they've just cut these adrift.

If Google had not emerged as the new obsession, they'd still be aiming for Apple with knock-off interfaces, Zune etc.

This is reaaly the MS tradgedy: instead of being customer focussed and delivering new exciting products and technologies (something such an organisation should be able to do with their huge resources), they have become competition focussed.

Google is going to kill MS unless MS can stop them. Keep in mind that MS has NEVER been customer focused. They have been about aquiring an edge. Well, they have one with their monopoly. And Google combined with OSS is likely to break it apart. In fact, I think that they are going to do what W. and even the EU has not done.

I know bunches of people still cruising around the net on Win2K because they refuse to use a newer version of Windows. There's a general sentiment that once their PCs die they'll either switch over to a Mac or some Linux distro.

raising my handI'm running Win2k on my T23. It shows no sign of dying yet, excuse a cracked palm rest over in the corner... and I'm on my second keyboard and probably gonna go for a third.

I'm waiting for the next LTS release of Ubuntu. I'm about 95% there and this new release may t

Microsoft has been, for a lot of its history, very customer focused. They would not be able to achieve their current market position without being customer focused. It wasn't until they have secured their monopoly on Windows through OEM deals that they became the evil company they are today.

I can remember a couple brilliant examples where they outsmarted their competition by paying attention to what the market really wanted:

- Windows for Workgroups: They realized people did not want file and servers - they wanted to share files and printers and do e-mail. WfW, for all its failures, was a bright example of simplicity. With this, they more or less took the low-end of the NetWare business from Novell. This foothold allowed them to claim the rest of NetWare's share with NT.

- Visual Basic: People wanted an easy to use language to develop for Windows. The C/C++ tools they had were hideously expensive and painful to use (they more or less still are - C++ on Windows helps create the ugliest C++ I ever saw). VB surpassed all other development environments for Windows for flexibility, ease of use and productivity. It was the Ruby on Rails of its time. Sadly, it pretty much caused massive brain damage to a generation of programmers that never quite recovered.

Windows 3: People wanted GUIs but couldn't care less about bulletproof multitasking. OS/2 was great, but Windows 3 hit the sweet spot. 3.11 hit it even better with its TrueType rendering.

Windows 95: The last major overhaul of their consumer OS. Gave a nice (for the time) and easy to use GUI overhaul to the tired Windows 3 desktop. Thanks to the problems with the 68K to PPC transition, it was even stable compared to Macs - a first for MS.

NetWare 3 was painful to the extreme. It would require you to set up a dedicated server just for sharing files and, IIRC, the machines that shared the printers took a very heavy performance hit. That and the NLM way of deploying server software made NW3 the worst thing I ever saw in server software. Of course, these were because of the compromises derived from running it on crippled computers. The catch is that it was too complex and expensive for small offices that only wanted to work smarter.WfW mirrored

As someone pointed out, lack of customer focus is not a new thing for Microsoft. They have always been competitor focused. I don't think Microsoft can change this, it's too core to what their company is all about. Microsoft is always really unhappy when anybody talks about someone else more than them. They want to be 'it' for some rather amorphous domain of computer oriented mindshare.

This is pretty much conjecture on my part, but I believe that MSs OS strategy is to turn windows into a sandbox for virtual systems with execution... Basically all legacy support would be within a virtual system, in order to protect the main OS, which would run on a revised microkernel structure... Of course this would mean that Direct-3D would continue to see a major overhaul, though each major MS OS release has had this happen anyhow.. I think they're putting minimal effort into Vista in order to quell

They sure put a lot of effort into Vista and its SP1. On the other hand, it's painfully obvious that much effort did not translate into a timely delivery of a solid improvement over XP. This leads to the inescapable conclusion they put their effort in the wrong places.Had they really been paying attention to their customers, they would have released Vista three years ago with a subset of its features. It would be twice as big as XP and run just as fast. Instead, they delivered what they thought the market w

Google apps are a joke for the enterprise software market as well as any public company due to SOX, HIPAA and other laws. this article actually has a point

with Yahoo Microsoft is paying $40 billion for a bunch of web designers, some media contracts and other intellectual talent that can flee at any time and MS will have to keep the business going. Customers can flee to any competitor with a minimum of problems.

with SAP Microsoft will gain a product lineup with large customers that pay for service, can't migrate easily and SAP's product will have synergies with Microsoft's other products where they can sell more products to a customer.

and Google seems to be coming to the end of the current growth cycle. revenue and profit growth seems to have peaked, expenses are going up, they seem to be expanding to new areas that don't really make any sense to the core business, the new expansions don't seem to be #1 in their areas and Google doesn't seem to want to make them #1, Google's big thing is the search algorithm and the infrastructure behind it and they don't really own any data they return and the owners of the data may one day start to demand royalties or block Google from it like say blocking their site from Google News, funny things happen in recessions when businesses start looking under every rock from cash, a lot of Google's customers are small businesses and have a real chance of going under in a recession

Google apps are a joke for the enterprise software market as well as any public company due to SOX, HIPAA and other laws.

Google apps hosted by google are a joke. Google apps hosted locally within your corporation are a great idea. They have the potential to provide enhanced security and privacy. The problem with Google aps is functionality. Google docs has no concept of margins whatsoever and Googles workaround is to resize your browser window. Google could potentially solve these problems but from what I've seen they don't seem interested in fixing issues like this. Just adding the next wizzbang feature. MS Office does an e

I agree, Google apps don't have the full feature set of desktop office software. But it is a way better for shared document editing than MS Office. Granted, I've never really seen Sharepoint used to it's best, so maybe that's not entirely true if you have the full MS kit setup.If you have a group of people who need to work on a simple spreadsheet together to collect data (e.g. mailing addresses), a Google spreadsheet is perfect. Reasonably easy to learn, and excellent maintainability.

I agree, Google apps don't have the full feature set of desktop office software. But it is a way better for shared document editing than MS Office. Granted, I've never really seen Sharepoint used to it's best, so maybe that's not entirely true if you have the full MS kit setup.

I disagree. How can it be better for shared document editing when it doesn't support the features necessary for document editing? Thats kind of like saying a wagon is better for a road trip across country than a motorcycle... yeah they both suck for it but I'd much rather take the motorcycle (MS Office) than the wagon (Google docs). Sure I can fit more stuff in the wagon and maybe bring a friend but it'd be much easier for me and my friend to both have our own machines and just pass a bag of chips back and

I guess you've never had the pleasure of passing a work document around a group of say 5 people. Sooner or later someone will mess up and edit the wrong version of the email attachment and suddenly there's a fork. Never mind the fact that it makes the entire group effort a serial process. It's really tough to effectively get multiple people working on the same document at once in "traditional" office software. Though, I'm not actually sure how well Google Docs handles simultaneous edits, I'm sure that eve

Actually, I think they might take off again with all this mobile business. It's rather novel, really. They already won just about everything there is to win in online ads, so instead of a totally new business model, they expand the market itself.

It's a much better solution IMHO than trying to rip off the market they already dominate, as some folks we know tend to do.

with SAP Microsoft will gain a product lineup with large customers that pay for service, can't migrate easily and SAP's product will have synergies with Microsoft's other products where they can sell more products to a customer.

But I'm of the opinion that Microsoft can (and does, in fact, have their eyes on) get most of the benefit there without having to buy SAP to do it.

I don't see SAP alone as being a major growth product at this point in time. It's aimed at fairly massive corporations, and I think by this point, most of the existing companies that see a need for something like SAP have already implemented one.

I think the synergy potential between existing SAP systems and Office/.NET/Windows Workflow/BizTalk/etc. is enormous. Company A has SAP implemented already? Well, maybe they'd like an application that sits in Outlook and automatically grabs order e-mails from customers and pre-fills most of the data in their SAP order entry forms and auto-archives the e-mails sorted by customer across all salespeople in some searchable central repository, making their salespeople that much more efficient and eliminating a lot of operator error.

On the surface, that doesn't make Microsoft a lot of money, but it ensures that all the people at that company definitely need Office (and not just something that can work with the same file formats, not that anyone's rushing to get away from Office at the moment), need a Windows server, need consultants with MS-tech expertise to set it up, etc. It gets people thinking of MS as a business solutions company and not just an OS/Office company, which it isn't to a lot of people yet.

It doesn't take a lot in the way of SAP/MS cooperation to make the SAP interface part of this easy, and my understanding from people that have worked on projects in this mold is that it's already there.

I don't see SAP alone as being a major growth product at this point in time. It's aimed at fairly massive corporations, and I think by this point, most of the existing companies that see a need for something like SAP have already implemented one.

The thing with massive corporations is that they could afford big iron back when big iron was the best solution for certain problems. SAP is still making a lot out of the modernisation of these old systems. My wife is currently working on a migration from a propri

There are companies that are not subject to SOx than are. SOX, contrary to popular belief, only applies to publicly held companies that trade on U.S. exchanges. Just as small business collectively employ more people and have greater total revenue than large companies, it would not suprise me to see there being far more available funding, albeit in much smaller doses, from those that do not have to worry about SOX.Therefore, there is a definite and good sized market for those who don't have to worry about SO

Google has made a lot of money from ad sales and web search. That's one big fat market segment, without a doubt. But no one uses google for comporate data processing. They do, however (and for better or worse), use SAP. In the services sector, which Yahoo and Google aren't in, SAP is big. That's not to say that they're brilliant but they do make money and are a 'best of breed' (doesn't speak well of the breed, but that's another post).

Yahoo is real estate. SAP is a running, producing engine. I think SAP is a better idea. Leave Yahoo alone, I'd say to Microsoft. Stick with what you do best: tying up clientele with proprietary, always-needs-integration stuff.

I can't imagine SAP's websphere/java using userbase being enthused with the next SAP release being C# only

I think this is the largest reason why Microsoft is doomed to fail if they don't get their act together. They require a massive corporate lockin with all of their products, and there is a much smaller pool of startups doing creative things with.NET

Even yahoo has acquired many companies that operate outside of the "Microsoft bubble". Microsoft would stumble in a huge way if they tried converting all of yahoo's acquisitions into pure.NET environments, and that would likely require them flushing out a majority of the old programmers, and getting new ones, which sort of adds bloat and eliminates the whole point.

Advice to microsoft:* Learn to play nice with standards that already exist instead of wasting money creating your own.* Stop trying to sell software, move to a pure subscription model.* Make sure.NET integrates well with java.* Make sure linux and OSX machines can integrate well into Microsoft environments.* If you actually sit down and talk with apple, yahoo, google, sun, etc, I am sure they would be perfectly willing to cut you in to how they are revolutionizing information. You need to learn your place and stop pretending like you can take them all on at once. Your biggest weakness is that you do not know how to operate in your own market any more.

If Microsoft does all of those things, they have a chance of surviving the next 10 years. I really want to see them succeed because I love the progress Microsoft research is making in the fields of virtualization and compiler theory. Stuff coming out of Microsoft research is pretty cool, but their marketing department is killing them.

The article is looking at things totally from the wrong point of view - it's as if they believe that Microsoft's problem is that it has a huge pile of cash & don't know what to do with it.

It's not. Microsoft's problem is Google.

Above from parent post is the wrong point of view. The primary purpose of any corporation is to earn money for its owners, the stockholders. It is not to pursue a quasi-religious vision of the digital future.

TFA suggests that Microsoft would be better off investing its $billions of loose change in a healthy business, rather than in a competitor that is also sick. This would certainly the prudent thing to do. Microsoft should have done this a decade ago. Keeping all those retained profits in highly liqui

I agree. But I'd say first and foremost, Microsoft's problem is Microsoft. The Ford motto was (is?) "Quality is Job #1". Instead of spending billions acquiring companies, spend it on better quality software development.In this case, spending billions to acquire another company just cause you're sitting on billions makes no sense. They're going to waste billions more after the purchase to figure out how to transform SAP, Yahoo or whatever into Microsoft. There's a lot of companies that have succeeded doing t

I have to agree here. I've been using SAP for almost 10 years now from the technical support side, and I can only imagine what "improvements" MS would make. They only company I can see benefitting from this merger is Oracle and their ERP solution.Oh, and I can promise you this, if one day in the future I open my SAPGui and that damn paperclip pops up to ask "I see you are trying to heirarchy to organize your material management, can I help?", I will drive to Redwood and burn it to the ground. Not just MS

SAP isn't so much a finished application as a license for the vendor to bleed you dry with "special" modules supposedly tailored to your business. In one way, Microsoft software doesn't fit that model (i.e. SAP isn't just a shrink wrapped product like Office). In another way, the endless bleeding of your tech dollars while your practices are changed to match the (in)capabilities of SAP would suit their revenue requirements perfectly. The real problem is that SAP is probably too labour intensive for a company like Microsoft.

Many people don't realize that MS already has a business Strategy for ERP systems. They've bought several small to large system. Navision, Great Plains, Axapta, Solomons. They have built in house CRM system and they are creating the Dynamics Product. Getting TOP 500 customers doesn't make sense for MS. They have already spent their money and won't change or grow. It's the small-mid businesses that will be growing and MS will be right there providing them with the right software. MS already considered buying SAP 6 or 7 years ago and the culture clash and business model did not fit MS goal, which is every business to run on their ERP system.

An acquisition works when both the acquirer and acquiree emerge stronger (ie sum greater than its parts). That is not the case with MS+Yahoo, but it could be with MS+SAP.

MS already have very strong business units dealing with large organisations and combining with SAP could potentially strengthen both parties by providing more vomplete solutions, one stop shopping & service etc.

By comparison, the yahoo thing is a wtf. Both MS and Yahoo are on the downward direction in click ads and online services and c

My current employer is a dominant player in our field, in a smallish country, that sells about a billion dollars of $stuff a year to 10,000 or so customers.

Our $30m+ competition for a new ERP system came down to SAP vs Microsoft.

SAP gave us 50 reference companies of similar size in similar industries, 5 of them in the same country as us, 3 of whom let us visit on site and grill them about their setups.

Microsoft gave us one reference company smaller than us in our country AT ALL, and one company in the US in a similar industry, but 10 times smaller than us.

We got the distinct impression that we would be pretty much the largest deployment EVER of Microsoft Business Apps in an industry similar to ours, by an order or magnitude.

SAP won, of course.

Microsoft has a horrid bootstrapping problem. Until they build up experience and a userbase that people like us can go visit and actually SEE their stuff working, they're going to struggle to be competitive.

The other big plus for SAP was their upgrade attitude "We understand that most of our customers want to upgrade their core ERP around every 8-12 years, on a Saturday afternoon":)

Our $30m+ competition for a new ERP system came down to SAP vs Microsoft.

Let me guess, you work for Microsoft? I say this because I have heard that Microsoft's main criteria for choosing an ERP system was "not Oracle" (they eventually decided their own software didn't cut it and went with SAP). Most people would consider JD Edwards, Siebel and PeopleSoft way before Microsoft entered the equation.

Wrong platform: SAP runs on all sorts of platforms. Short of gutting the customer base there's no way they'll ever push platform support purely onto a windows platform. If they don't make that change though, then you'll have a mircrosoft division (SAP) selling you a product that runs on a combination of Solaris and Oracle. Talk about a non starter.

Wrong business model: SAP is a platform, meaning you buy it and then spend millions of dollars and years of consulting to "customize" it to your organization's needs. It's about as far from shrink wrap as you can get. Microsoft has virtually no experience in this kind of enterprise software market.

Wrong culture: SAP is about as germanic as a firm can be and, in their own way, every bit as committed to global domination as Microsoft is (albeit in a different market space). Trying to integrate the two firms, even into a loose confederation like, say, GE or Mitsubishi, and expecting anything other than all out, internal, bureaucratic warfare is willful ignorance (or gross stupidity).

The article is very likely right, but I don't see it happening, because what drives Microsoft is not so much profit as control and being seen as top dog in the computer world. Even if it proved even more profitable than their current business, MS would not be happy ceding its dominant position in the personal computer world and becoming a backstage purveyor of business software and services. MS would be obsessed with Google even if there were no threat from network applications because Google has been much more successful in an arena visible to the average person.

Microsoft already has an SAP-like product line: Microsoft Dynamics. It's a better product built by a European company that MS bought out a few years ago. Why would MS buy SAP if they already have something better?

Stupid MS branding. Microsoft Dynamics isn't actually a product, but a "suite" of products. The product you are referring to is MS Dynamics GP [wikipedia.org], formerly known as Great Plains, and the software I'm referring to is MS Dynamics NAV [wikipedia.org], formerly known as Navision and built in Denmark. Navision is most definitely suitable for medium+ sized businesses, and it's a good product from the presentations I've seen. Whether SAP was really designed to be anything but horrible is questionable.

Why would you use an ERP system on your point-of-sales systems? Perhaps you're thinking of another product. If not, some detail as to why you consider it crap would be appreciated. You can't please all of the people all of the time, but if there are some serious flaws I don't know about, I'm all ears.

I think SAP is a poor fit. Yahoo fits Microsoft's needs. Microsoft wants to further entrench user lock-in to their company. Buying SAP gets them more income directly, perhaps, but that money coming from big companies who can demand flexibility or hire IBM and go open source if need be. What Microsoft wants is to get their claws into more users' online services, which can be tied to Windows and MS specific protocols and formats. Their greatest fear is that the Web will allow other companies to supply al a user's basic needs via the browser, meaning those users can buy a Linux box or an OS X box or a Solaris box or an iPhone or a Blackberry or anything that is not Windows.

MS doesn't need more revenue. Their users will continue to pay because they have no choice. MS has their data and their networks locked up and the expense of switching is too high. MS doesn't want Yahoo to get more revenue. Almost all Yahoo users are Windows users and MS already collects their tithes. MS wants Yahoo to make sure Yahoo users are not given a choice of migrating to being Yahoo/Linux users or Yahoo/MacOS users instead of Yahoo/Windows users. Further they want the lion's share of the market so that most people are locked in. Right now, between Google and Yahoo, most users are not locked in for their mail and messaging and calendaring and in a short time, perhaps their office suite and IM and internet phone and internet TV and whatever else becomes a Web service. If they have most users then they can use that to break compatibility with Google and so Google will have to waste time, effort, and money trying to reverse engineer all of their proprietary apps, to the point of having to screen scrape to get data back to an open and usable format (which they already had had to do to some degree).

In summary, MS wants to buy people so they can use their normal tactics instead of competing to create a better product. If they were interested in making money on their acquisitions they would not have bought dozens of game companies and created the XBox. They want a presence in the living room so they can lock in people even more. Once they have lock-in they can take all the money they wish from people for perpetual upgrades and fees, so long as they make the pain of getting away from them greater than the cost at any given time.

They're already an industry-leading, publicly traded company. Microsoft sure isn't going to increase their market share, and they have nothing at all to offer SAP in the way of technical or management skills.

/me raises hand. That company had in a few years (with each change of CIO) solutions from SAP, PeopleSoft, some other package and Microsoft. The original IBM application was still working fine, running on some old mainframe from the early 90's (coax and green CRT terminals still all over the production area). Off course none of the new ones did their job and each had part of the business working so the year I came in, they had consultants (close to a 100, if you never heard of the mythical man-month, you sh

Okay, I understand that MS is hurting and they need to do something. My answer is MS research. You have the development labs. You have the cool ideas. Use them. INNOVATE DAMMIT. Google didn't get to this point by the standard merger philosophy. MS, you didn't get to where you are by stupid mergers and desperate acts. You got there by providing something that people wanted, in a better manner or for cheaper. Keep doing it. PUSH the boundaries of what you're doing. Yeah, it's higher risk. But the reward is higher. You get the revenue, the soft benefit of everyone loving your company vs everyone hating it. You'll avoid the monopoly claims because you won't be a monopoly. The only downside is higher risk. You have the cash to offset that. Use it.

... right. Because Google would never, for example, ditch their internally-developed Google Video for a giant buyout of YouTube. They're too much about innovation for that.

There's nothing wrong with buying up a competitor that does something better than you do. There's a lot more examples of Microsoft doing it because they've been around longer and have a bigger wad of cash, but there's nothing new under the sun here.

1) Knock down their own share price by announcing ridiculous hostile takeovers of companies that will never agree to it.2) Buy back Microsoft stock on the (relatively) cheap3) Profit!

Well, OK, the math isn't all that impressive, but slowly taking the company private through stock buybacks is considerably more sane than most other suggestions of what to do with their cash horde. If you ignore the huge chunks of stock controlled by Gates and a few other early owners it looks more plausible. Effectively going private over time by getting rid of the public stockholders would give Microsoft the ability to take more risks. Paying dividends to employee-owners is a much better model than handing out stock options now that the dot bomb insanity has wound down. (It's late, hopefully that's coherent...)

Microsoft has gotten used to being the one dominant player in the computer industry. Well, times are changing, and there are other big players. They can't dictate everything anymore and they can't do everything anymore. They need to find profitable niches, not world domination.

SAP is a German company. Microsoft is already in enough trouble in Europe.Also, most of SAP's large stakeholders are SAP customers, and few of the large installations are on Windows/MSSQL. Most large implementations are on some flavor of Unix, Oracle, DB2, or mainframe. That's not saying that there aren't some major installations on Windows/MSSQL, but with Microsoft's history of lock-in, and with the extremely low speed at which implementations occur, there's no way in hell these customers (who all have

The "benefits" of SAP are quite debatable. I'd say that's true for practically ALL of these "enterprise class" applications that try to tackle the problem of integration of incoming sales orders, corporate accounting, shipping, human resources, etc. etc.

It's "beneficial" for the consultants who get highly paid to train employees on how to use the software, and for the people who customize the software for each business that takes them up on a purchase. But beyond that, it's unclear that it's *really* an efficient, worthwhile solution.

From past experience, I've observed a trend where these companies (whether it's Oracle, SAP, or you name it) make big promises, a company "bites" (knowing that the problems outlined really ARE big issues they'd LOVE to solve), and then the vendor proceeds to bleed millions of dollars out of their new customer. Eventually, something is constructed/customized that accomplishes SOME of the original goals, but does so in a rather clunky, bug-infested manner, while other items on the "want list" get bumped to "future stages of implementation" (which often never really get completed, because they're too costly and complicated). By this time, upper level management is forced to cost-justify the monstrosity, so they do their best to keep their jobs (and pride) by praising the software as a "big improvement" or "big step towards greater efficiency". Vendor then makes sure to quote them on that, and moves to the next sucker... uh, I mean customer.

IMHO, as disappointing as most Microsoft products are, they built their empire on the exact OPPOSITE philosophy. They promised "relatively inexpensive, out of the box" solutions to problems. Microsoft has never been about customizing their software for individual clients while charging by hours spent on them, nor do they tie customers to "maintenance contracts". They simply develop applications they feel will appeal to the majority of PC users out there, and make corrections and additions as they go, largely based on the collective feedback they receive.

So sure, you have silly things like people running around in large numbers, waving their MCSE certifications, expecting they should command top salaries because of them. But it's probably no more "silly" than companies scrambling to hire "experienced SAP implementation specialists" - when in reality, it just means you have people who helped muddle through the process of selling the stuff to previous customers. (You have no idea if they've ever done any customization work relevant to YOUR company's specific needs.)

Oh, really? Sworn to never run core business components on a Microsoft platform? I doubt there are very many companies out there like that of the appreciable size necessary to run and get benefits out of running SAP. If Microsoft turns out to have the best platform for what you need to run, then you run a Microsoft platform.What's more interesting is what happens to SAP's consultancy if Microsoft were to take over. There is a large percentage of SAP employees out there already who are less than enamored

Actually buying SAP would probably accelerate this.I would like to see Ms buy SAP. Integrate some decent management tools into the management console.

I mean I hate SAP monitoring the batches is horrible in the ugly java looking window. And if MS could put some money into SAP and creating an alternative to Tivoli and I would be one happy sys admin. I hate Basis admin , it becomes a tedious task and is much harder then it really has to be. I think MS would be able to dumb it down a bit and make it easier for